Abstract:
Since its introduction, business rescue has become a critical consideration in business
strategy decision making. One of the critical components of business rescue, which appears
largely unsuccessful to date, involves securing post-commencement finance (PCF) to
restore the company’s financial health. Despite extensive theory in the literature on failure,
there is a void regarding post-commencement finance. Specialist practitioners and financiers
with extensive experience in rescue and turnaround were interviewed in this study. Findings
showed that many critical factors and reasons for lack of interest are due to the newness of
the South African Companies Act 71 of 2008 (introduced May 2011). These include business
rescue filing being left too late; the poor financial state of the business that files for rescue;
and the significant impact on the outcome by some of the key players (especially the
financiers and business rescue practitioners). Better understanding of this aspect would be
beneficial for creditors, rescue practitioners, shareholders, government regulators, court
officials and educators alike.
